NSDL provides more clarity on frozen funds of Adani group-linked FPIs

Topics NSDL | Adani Group | FPIs

The National Securities Depository (NSDL) has rectified entries of certain foreign funds whose accounts have been frozen due to regulatory violation. Some of these funds include Albula Investment Fund, Cresta Fund, and APMS Investment Fund—famous for their investments in Adani group stocks.

NSDL, which has been tasked with monitoring foreign portfolio investor (FPI) investments in domestic stocks, added ‘GDR’ to their names in the list it maintains on its website. The move is to denote that only the global depository receipts (GDR) related accounts of these FPIs are under freeze.

Last month, ambiguity around the status of these funds had created panic among investors, triggering fall in shares of Adani group companies and wiping out market capitalisation of more than Rs 50,000 crore.

“The latest entry made by NSDL makes it clear that the account level freeze is only on the GDR accounts of the FPIs in question. While other beneficiary trading accounts of the three funds remain operational and active,” said a market expert.

Data available on NSDL website as on May 31 showed an ‘account level freeze’ on Albula Investment Fund, Cresta Fund and APMS Investment Fund—Mauritius-domiciled FPIs with combined investments of more than Rs 40,000 crore in Adani group companies.

On June 14, all the six Adani group stocks had slumped following a news report that accounts of these funds had been frozen.

The Adani group, NSDL and the funds had immediately clarified that the current status of these funds remained active and they were allowed to freely buy and sell securities.

The status displayed on NSDL’s website was pertaining to a five-year old order passed by market regulator Securities and Exchange Board of India (Sebi) and it impacted only the GDR accounts of these funds.

Industry players said following this incident NSDL should strive to provide more transparent data on its website. This will help improve transparency in the securities market, they said.

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